Debit Card Fraud: “skimmers” are a new threat

Credit cards offer you several protections, one of which is that your liability for fraud if your card is stolen is limited. (Others are detailed here in our article on New Credit Card Rules)

Debit cards are another story all together. When someone steals your debit card they can drain your checking account and the bank is under no obligation to replace your loss. Some banks do, but you may have to go through a lot of effort. Industry watchers say that the incidence of fraud involving debit cards has increased five-fold over the past five years.

The latest fad is “skimmers” which are devices that criminals put into stores where you swipe your card. They look like regular swipe boxes, and they send your info to the bank; but they also send it to the thieves, who use it to drain your account of cash.

Thieves get these skimmers into stores in many ways, including bribing store employees and posing as repair people. Recently, this happened at 80 stores owned by Michael’s Stores, according to the Wall Street journal. 90 tampered devices were discovered.

Thieves took the information from the skimmers, created duplicate debit cards and withdrew money from an unknown number of accounts, mostly in $500 increments. It is not known just how much was stolen.